WOODWARD, J.
Appellants, Linda Connors, individually and as personal representative of the Estate of Robert Connors, appeal from an Order of the Circuit Court for Montgomery County granting summary judgment in favor of appellee, Government Employees Insurance Company ("GEICO").
Finding no error, we shall affirm the judgment of the circuit court.
Linda and Robert Connors, husband and wife, were injured on April 14, 2009, while walking on Captain Dement Drive in Waldorf, Maryland. A vehicle driven by Adam Pond, pulled out of a driveway at 3269 Captain Dement Drive, striking Mr. and Mrs. Connors and knocking them to the ground. Mrs. Connors suffered minor physical injuries and significant emotional trauma, while Mr. Connors was injured severely, and he died on January 31, 2011. Mr. and Mrs. Connors were both "insureds" under a motor vehicle policy issued by GEICO which provided uninsured motorist coverage ("UIM") with policy limits of $300,000 per person/$300,000 per occurrence. The tortfeasor, Adam Pond, maintained automobile liability insurance through Allstate Insurance Company with liability limits of $100,000 per person/$300,000 per occurrence. With GEICO's consent, Mr. and Mrs. Connors accepted "per person" policy limits from Allstate, receiving $100,000 each, thereby exhausting the limits of the Allstate policy.
The Connorses submitted claims to GEICO pursuant to the UIM provisions of GEICO's Maryland Family Automobile Policy issued to Mr. Connors. GEICO asserted that, after crediting the policy for $200,000, which appellants received from Allstate, only $100,000 of UIM benefits remained. The Connorses disagreed with GEICO's calculation, contending that the "per person" limit of the policy should apply, leaving $300,000 in UIM benefits remaining.
The Connorses filed a claim with the Maryland Insurance Administration, pursuant to Maryland Code (1996, 2006 Repl. Vol., 2008 Cum.Supp.), § 27-1001 of the Insurance Article II ("I.A. II"),
On December 16, 2010, Mr. and Mrs. Connors filed a lawsuit against GEICO, seeking declaratory relief in the Circuit Court for Montgomery County. After considering cross-motions for summary judgment, the circuit court granted summary judgment in favor of GEICO. The circuit court, in relevant part, stated as follows:
Appellants noted this timely appeal.
When we review the decision of a circuit court granting summary judgment, we review that decision de novo. Powell v. Breslin, 195 Md.App. 340, 345, 6 A.3d 360 (2010), aff'd, 421 Md. 266, 26 A.3d 878 (2011). A trial court, when deciding a motion for summary judgment, may grant summary judgment if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor the judgment is entered is entitled to judgment as a matter of law. Id. at 345-46, 6 A.3d 360. Where there is no dispute of material fact, our review focuses on whether the trial court's grant of the motion was legally correct. Id. at 346, 6 A.3d 360.
Appellants contend that the circuit court erred in interpreting the language of the GEICO insurance policy's UIM provisions. They argue that the plain language of the insurance contract allows for both Mrs. Connors and the estate of Mr. Connors to collect $300,000 pursuant to the policy's "per person" limits. Specifically, appellants contend that the policy's "subject to" language in subsection (2) of the "Limits of Liability" portion of Section IV support the "per accident" limit as being subservient to the "per person" limit. Appellants assert that the UIM policy provides $300,000 "per person" worth of coverage irrespective of the limiting language $300,000 "per occurrence." Because there were claims filed on behalf of two individuals, Mr. Connors and Mrs. Connors, appellants contend the UIM benefits calculation should start with a total of $600,000 in UIM coverage. Appellants agree that GEICO should receive credit for the $200,000 from Allstate's liability policy, but argue that this amount should be applied to the $600,000 figure, leaving $400,000. Finally, appellants conclude their calculation by using the $300,000 "per accident" limit as a "cap" on the $400,000 aggregate amount, thus entitling them to a total recovery from GEICO of $300,000.
GEICO responds that the language of the UIM policy is clear and unambiguous, mandating that $100,000 of UIM benefits remain available to appellants. GEICO asserts that the insurance contract states clearly that the "per occurrence" limit applies to claims of two or more people, and is to be reduced by all amounts paid by the tortfeasor, in aggregate. GEICO also argues that appellants' interpretation of the "subject to" language is flawed, because, when read properly, it functions to restrict an individual insured from collecting more than the "per occurrence" policy limit. GEICO further contends that, in order to interpret the insurance policy accurately, the contract must be read in context with Maryland's UIM statutory scheme and relevant case law. According to GEICO, appellants' conscious decision to purchase $300,000 in UIM coverage, viewed in accord with Maryland's UIM statute, represents "the amount that would place [a]ppellants in the same position [as] if the tortfeasor had carried identical liability coverage." GEICO also contends that Maryland case law supports the "per occurrence" limit as the "appropriate starting point" for a UIM "gap" calculation. GEICO concludes that the circuit court was correct in finding that $100,000 of UIM benefits remain under the provisions of the insurance policy and in granting summary judgment in its favor.
UIM coverage "plays a leading role in Maryland's comprehensive motor vehicle
Uninsured, and underinsured,
We interpret the language of an insurance policy in accord with the same principles applicable to the construction of other contracts. Mitchell v. AARP Life Ins. Program, N.Y. Life Ins. Co., 140 Md.App. 102, 116, 779 A.2d 1061 (2001). Like any other contract, an insurance contract is "measured by its terms unless a statute, a regulation, or public policy is violated thereby." Pac. Indem. Co. v. Interstate Fire & Cas. Co., 302 Md. 383, 388, 488 A.2d 486 (1985). The words of an insurance
The pertinent provisions of the GEICO policy are set forth below:
(Emphasis added) (bold italics in original).
Appellants contend that the appropriate benefits calculation begins with subsection (1), which mandates a $300,000 limit for "each person" resulting from "one accident." Appellants argue that the "subject to" language in subsection (2) makes the $300,000 limit governing "each accident" subservient to the $300,000 limit for "each person" from subsection (1). Appellants' reading of the insurance contract would allow an additional recovery of up to $200,000 for Mrs. Connors individually and an additional recovery of up to $200,000 for the estate of Mr. Connors. Appellants further argue that failing to give meaning to the "subject to" language of subsection (2) would allow GEICO to "avoid paying benefits it otherwise agreed to pay." To provide additional clarity, appellants argue that the UIM benefits should be calculated as follows:
Estate of Mr. Connors: GEICO UIM Coverage $300,000 per person Payment from Tortfeasor ($100,000 per person) _____________________ GEICO Coverage Remaining $200,000 per person Mrs. Connors: GEICO UIM Coverage $300,000 per person Payment from Tortfeasor ($100,000 per person) _____________________ GEICO Coverage Remaining $200,000 per person
Appellants conclude that by utilizing the per accident limitation of $300,000 as a cap on the above-calculated $400,000 aggregate amount, they are ultimately entitled to $300,000 in remaining UIM benefits.
GEICO counters that "subsection (2) is the starting point, not subsection (1), because the claims involve injuries `sustained by two or more persons as the result of one accident.'" GEICO argues that using subsection (2) as a starting point, the per accident limit of $300,000 is reduced by the $200,000 received from the tortfeasor, leaving $100,000 in UIM benefits available to appellants. GEICO contends that the "subject to" language of subsection (2), when read properly, further limits liability pertaining to one accident involving one person. To provide additional clarity, GEICO argues that the UIM benefits should be calculated as follows:
Estate of Mr. Connors and Mrs. Connors Individually:
GEICO UIM Coverage $300,000 per accident
Payment from Tortfeasor ($200,000 in aggregate)
_____________________
GEICO Coverage Remaining $100,000 per accident
We agree with GEICO.
The plain language of subsections (1) and (2) of GEICO's insurance policy, indicates the correct starting point for calculations of UIM benefits and the corresponding coverage limitation. The decisive factor, in our view, is the number of injured insureds claiming under the policy. Subsection (1) clearly states that it is applicable to "bodily injury sustained by one person as the result of one accident." It follows logically that, if one insured is injured as the result of one accident, subsection (1) limits the liability of the insurer to the coverage limits pertaining to "each person." For example, if Mrs. Connors was the only person injured in the accident, subsection (1) would be the appropriate starting point for the UIM benefits calculation, limiting GEICO's liability to the policy's "each person" limit of $300,000.
Conversely, the unambiguous language of subsection (2) makes it applicable to "bodily injury sustained by two or more persons as the result of one accident." Therefore, if two or more insureds are injured as the result of one accident, subsection (2) will apply to limit the liability of the insurer to the coverage limits relating to "each accident." When subsection (2) is the starting point for a claim, the "subject to" qualifying clause functions to further limit the liability of the insurer. Subsection (2) sets the "each accident" limitation for an injury involving two or more insureds, which is then further restricted by the "each person" limit of subsection (1). The qualifying clause does not subvert or modify the hierarchy of the subsections, as
Appellants' contention that the "per accident" limitation of subsection (2) is "subject to" the "per person" limitation of subsection (1) arises out of their reading the contract provisions chronologically in the order of subsection (1) followed by subsection (2). Although appropriate with some contracts, this is not the manner in which the GEICO provisions were intended to be navigated. As stated above, the number of injured insureds is the crucial factor when determining in which paragraph the calculation originates, not the numeral preceding the contract provision.
We find no controlling precedent narrowly tailored to the facts of the instant matter. The Court of Appeals' decision in Waters v. U.S. Fidelity & Guaranty Co., however, is instructive when considering issues involving Maryland's UIM statutory scheme. In Waters, Schreier drove a pickup truck across the center line and collided with a vehicle driven by Dunham. 328 Md. at 705, 616 A.2d 884. Waters was a passenger in the truck, and Waters carried UIM coverage with limits of $100,000 per person/$300,000 per accident. Id. at 706, 616 A.2d 884. Schreier maintained automobile liability insurance with limits of $100,000 per person/$100,000 per accident. Id. When $97,000 of Schreier's $100,000 liability policy was exhausted to cover injuries to Dunham, Waters filed a UIM claim to recover damages, which was denied by his insurer. Id. The trial court found that Schreier was not uninsured and therefore Waters could not collect under his policy for uninsured motorists. Id. at 707, 616 A.2d 884.
The Court of Appeals discussed the legislative intent underlying Maryland's UIM statute, while additionally contrasting the gap theory of recovery with the excess theory of recovery.
In Hoffman v. United Services Automobile Ass'n, the Court of Appeals considered recovery under supplemental UIM coverage in excess of the statutorily required amount. 309 Md. at 171, 522 A.2d 1320. The Hoffmans had purchased an automobile policy which included the statutorily required UIM coverage, and additionally, a supplemental UIM policy with limits of $300,000 per person/$500,000 per accident. Id. at 169, 522 A.2d 1320. Mrs. Hoffman was killed and Mr. Hoffman was seriously injured during an automobile accident, as passengers, in a vehicle driven by Whelan. Id. After recovering from the tortfeasor's liability policy and Whelan's UIM policy, Mr. Hoffman sought additional compensation under his supplemental UIM policy. Id. at 169-70, 522 A.2d 1320. Mr. Hoffman's UIM provider denied the claim, arguing that an insured could not recover on a duplicative basis subsequent to receiving in excess of the statutory minimums from other insurance sources. Id. at 170, 522 A.2d 1320. The Court of Appeals found in favor of Mr. Hoffman recovering from his supplemental UIM policy, concluding that the General Assembly intended to make "`available to the insured the opportunity to contract for higher amounts than those provided under Title 17 of the Transportation Article ... if these amounts do not exceed the amounts of the motor vehicle liability coverage provided by the policy.'" Id. at 178, 522 A.2d 1320 (quoting Md.Code (1972, 1981 Repl. Vol.), Art. 48A § 541(c)(2)).
In support of their position, appellants rely on the North Carolina case of Aills v. Nationwide Mut. Ins. Co., 88 N.C. App. 595, 363 S.E.2d 880 (1988). Mr. and Mrs. Aills were severely injured in an automobile accident in which the at-fault driver maintained liability insurance of $50,000 per person/$100,000 per accident. Id. at 881-82. The trial court awarded the Aillses over $650,000 in combined damages. Id. at 881. The tortfeasor's liability insurance was exhausted under the per person limits, paying Mr. and Mrs. Aills $50,000 each. Id. The Aillses each made a claim under Mr. Aills's UIM policy which provided coverage limits of $100,000 per person/$100,000 per accident. Id. The UIM insurer denied the Aillses' claims, contending that the tortfeasor's insurance had paid $100,000 in aggregate, and no further payment was due. Id. at 881-82. The insurance policy contained the following language, limiting the insurer's liability:
Id. at 882. The Court of Appeals of North Carolina found the language susceptible to differing interpretations, and therefore construed the provision against the insurance company. Id. The court concluded that the "subject to" language made the "each accident" limit subordinate to the "each person" limit, entitling the Aillses to an additional recovery of $50,000 each. Id.
In further support of their argument, appellants cite Austin Mut. Ins. Co. v. King, 29 F.3d 385 (8th Cir. 1994). There, the tortfeasor, Leichtenberg, ran a stop sign and hit a car driven by King. Id. at 386. King and two of her passengers were seriously injured, while three other passengers
Id. at 388 (first and third alterations in original). The Court of Appeals for the Eighth Circuit held that the policy's "subject to" language dictated that the per person limit applied, and the per accident limit on the coverage acted only as a cap to the aggregate recovery. Id. at 388-89. King and each of her passengers would recover $50,000 per person from the UIM insurer (less the amount received from the tortfeasor), subject to an aggregate maximum of $100,000 (the per accident limit). Id.
Appellants' reliance on Aills and King is misplaced. The limiting provisions in both Aills and King are clearly distinguishable from the limiting provision in GEICO's policy in the case sub judice. The limiting provisions of the GEICO policy are structured in subsections; subsection (1) applies unequivocally to accidents involving one insured and subsection (2) applies unequivocally to accidents involving two or more insureds. The "subject to" language in the GEICO policy appears as a qualifying clause within subsection (2), located in between two commas. In contrast, the limiting provisions in Aills and King consist of a single paragraph with the "subject to" language at the beginning of a sentence. Aills, 363 S.E.2d at 882; King, 29 F.3d at 388. The provisions in Aills and King establish liability limits based on one person and limit that amount using the per accident limit. Aills, 363 S.E.2d at 882; King, 29 F.3d at 388-89. This is materially different from the limiting provision in GEICO's policy, which establishes the applicable limitation based on the number of injured insureds making UIM claims. The structure of the provisions in Aills and King, the location of the "subject to" language, and the method of determining liability limits is substantially different from that of the GEICO provision.
Moreover, as to Aills, the North Carolina UIM statutory framework is distinguishable from Maryland. The North Carolina UIM statute mandated two specific steps evidencing the legislature's intent as to what coverage limit applies: "(1) the number of claimants seeking coverage under the UIM policy; and (2) whether the negligent driver's liability policy was exhausted pursuant to a per-person or per-accident cap." N.C. Farm Bureau Mut. Ins. Co. v. Gurley, 139 N.C. App. 178, 532 S.E.2d 846, 848, review denied, 352 N.C. 675, 545 S.E.2d 427 (2000). The second prong of the North Carolina statute, as interpreted by the court in North Carolina Farm Bureau Mutual Insurance Co. v. Gurley, required the per accident limit of the UIM policy to govern when the per accident limit of the tortfeasor's liability policy was used, and required the per person limit of the UIM policy to govern when the per person limit of the tortfeasor's liability policy was used. Id. at 849. In the case sub judice, I.A. II § 19-509 fails to provide the level of statutory guidance as does the North Carolina UIM statute
In sum, there is no available case law which is identical on the facts and law to the instant matter. The Maryland case law sufficiently supports our analysis of the GEICO policy language, while the out-of-state precedent offered by appellants lacks factual and statutory similarities to contradict our decision.
Assuming arguendo that the language of the GEICO insurance contract is ambiguous, we conclude that the result would remain unchanged. I.A. II § 19-509, contains the following provision which limits liability to an insurer:
This provision of the uninsured motorist statute explains how to calculate policy benefits. See Aetna Cas. & Sur. Co. v. Souras, 78 Md.App. 71, 78, 552 A.2d 908 (1989) (noting that the statutory predecessor to I.A. II § 19-509(g) "provides a formula for calculating the amount of uninsured motorist coverage"). The Court of Appeals in Waters eliminated any remaining ambiguity surrounding Maryland's method of UIM calculation stating as follows:
328 Md. at 712 n.5, 616 A.2d 884 (citations omitted). Accordingly, in Maryland, a gap theory state, the injured insured may recover the difference between his or her UIM coverage and money received from the tortfeasor. Id. In Colonial Ins. Co. of Cal. v. Batson, 85 Md.App. 467, 475 n. 1, 584 A.2d 137 (1991), this Court found that, when calculating UIM benefits under a gap theory, "the insured is covered to the extent of his policy less the amount of insurance paid by the tort-feasor's carrier."
Appellants agree that Maryland is a gap theory state, but contend that the court "misapplied the `gap theory' in calculating the UIM benefits owed to [them]." Appellants contend that GEICO should not receive credit for "all payments made by the tortfeasor's carrier," but instead, "credit is to be based on what each person receives."
GEICO counters that, pursuant to the gap theory of recovery, appellants should receive the difference between the "per occurrence" UIM policy limits ($300,000) and what the tortfeasor's liability insurance paid ($200,000). GEICO contends that it should receive credit for the full $200,000 paid by the tortfeasor's liability insurance, because a finding to the contrary would be pursuant to the "excess theory," which Maryland does not follow. We agree with GEICO that the gap theory was applied correctly by the trial court, and $100,000 in UIM coverage remains available to appellants.
In Gurley, the North Carolina Court of Appeals faced a similar situation. The defendants in Gurley proposed a similar theory of recovery to that proposed by appellants and the court noted the unintended consequences that would result stating as follows:
532 S.E.2d at 849 (citation omitted).
In sum, we affirm the circuit court's grant of summary judgment in favor of GEICO, holding that the clear and unambiguous language of the GEICO insurance
